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Swedish Banking Regulation: Authorization and Control Requirements

Authorization Requirements for Banks and Credit Institutions in Sweden

To establish a banking operation in Sweden, an applicant must meet specific conditions as outlined below:

1. Articles of Association Compliance

  • The articles of association must comply with the Banking and Finance Act (BFA) and other relevant legislation.
  • There must be reason to assume that the business will be conducted in accordance with the BFA and other applicable legislation.

2. Suitability of Owners and Management

  • Owners of qualifying holdings must be deemed suitable to exercise significant influence over the undertaking.
  • Members of the board of directors (the board) and senior executives must possess the insight, competence, and experience necessary to manage a bank.

3. Minimum Starting Capital

A bank must have a starting capital corresponding to at least EUR5 million at the time of commencing business once the application has been approved.

Control Requirements for Banks in Sweden

Qualifying ownership requires prior approval and ownership assessment by the Swedish Financial Supervisory Authority (SFSA). Any individual or entity acquiring a qualifying holding (defined as a direct or indirect holding of at least 10% of the capital or voting rights) must be subject to this process.

Factors Considered in Ownership Assessment

The SFSA will assess whether the acquirer is suitable to own a qualified holding, considering factors such as:

  • The reputation and financial strength of the acquirer
  • The reputation, competence, and experience of the management of the acquirer
  • The bank’s ability to comply with prudential requirements after the acquisition
  • If the acquisition has a connection to or increases the risk of money laundering or terrorist financing

Regulatory Filings for Banks in Sweden

The application for approval is made using standard forms provided by the SFSA. The magnitude of the information that must be provided in the application varies depending on the size of the holding acquired, but includes information about:

  • The organisational structure of the acquirer (including an ownership chain)
  • The acquirer’s financial situation
  • The acquirer’s management
  • Business and financing plans

The SFSA has a handling time of up to 60 working days from the date a formally complete application is filed. During the assessment period, the SFSA may request additional information, in which case the assessment period is suspended.

If the SFSA decides to oppose the proposed transaction, it must inform the proposed acquirer of the decision in writing. The decision may be appealed to the administrative courts of Sweden.